Exhibit 99.2
ELONG POWER HOLDING LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amount in U.S. dollars, except for number of shares or otherwise noted)
| As of June 30 | As of December 31 | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | ||||||||
| Short-term investments | ||||||||
| Accounts receivable | ||||||||
| Amounts due from related parties | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Current assets held for sale associated with discontinued operation of ELPW | ||||||||
| Total current assets | ||||||||
| Equity method investment | ||||||||
| Property, plant and equipment, net | ||||||||
| Right-of-use assets, net | ||||||||
| Non-current assets held for sale associated with discontinued operation of ELPW | ||||||||
| Total non-current assets | ||||||||
| Total assets | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Short-term loans-third parties | ||||||||
| Short-term loans-related parties | ||||||||
| Accounts payable | ||||||||
| Amounts due to related parties | ||||||||
| Contract liabilities | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Provision for product warranty, current | ||||||||
| Lease liabilities, current | ||||||||
| Current liabilities held for sale associated with discontinued operation of ELPW | ||||||||
| Total current liabilities | ||||||||
| Provision for product warranty, non-current | ||||||||
| Lease liabilities, non-current | ||||||||
| Non-current liabilities held for sale associated with discontinued operation of ELPW | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Class A Ordinary Shares, US$ par value, shares authorized, shares issued and outstanding as of December 31, 2025; * shares issued and outstanding as of June 30, 2026; | ||||||||
| Class B Ordinary Shares, US$ par value, shares authorized, shares issued and outstanding as of December 31, 2025; shares issued and outstanding as of June 30, 2026* | ||||||||
| Treasury shares | ( | ) | ( | ) | ||||
| Additional paid-in capital | ||||||||
| Statutory Reserve | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive (loss) income | ( | ) | ||||||
| Total shareholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities and shareholders’ equity (deficit) | ||||||||
| * | ||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| FS-1 |
ELONG POWER HOLDING LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Amount in U.S. dollars, except for number of shares or otherwise noted)
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Unaudited | Unaudited | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ( | ) | ( | ) | ||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES | ||||||||
| Selling expenses | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| TOTAL OPERATING EXPENSES | ( | ) | ( | ) | ||||
| OPERATING LOSS | ( | ) | ( | ) | ||||
| OTHER (EXPENSE) INCOME | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Foreign currency exchange losses, net | ( | ) | ( | ) | ||||
| Share of profit from equity method investment | ||||||||
| Fair value losses on short-term investments | ( | ) | ||||||
| Other income | ||||||||
| TOTAL NON OPERATING EXPENSE, NET | ( | ) | ( | ) | ||||
| LOSS BEFORE INCOME TAXES | ( | ) | ( | ) | ||||
| INCOME TAX EXPENSE | ||||||||
| NET LOSS FROM CONTINUING OPERATIONS | ( | ) | ( | ) | ||||
| DISCONTINUED OPERATIONS: | ||||||||
| Loss from discontinued operations | ( | ) | ( | ) | ||||
| Gain on disposal of subsidiaries | ||||||||
| NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS | ( | ) | ||||||
| NET INCOME (LOSS) | $ | $ | ( | ) | ||||
| Net income (loss) per share attributable to ordinary shareholders of the Company- Basic and Diluted * | ||||||||
| Continuing operations | ) | ) | ||||||
| Discontinued operations | ) | |||||||
| Total basic and diluted | $ | $ | ) | |||||
| WEIGHTED AVERAGE SHARES OUTSTANDING USED IN CALCULATING BASIC AND DILUTED LOSS PER SHARE | ||||||||
| Class A and Class B Ordinary Shares | ||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| FS-2 |
ELONG POWER HOLDING LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Amount in U.S. dollars, except for number of shares or otherwise noted)
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| NET INCOME (LOSS) | $ | $ | ( | ) | ||||
| OTHER COMPREHENSIVE INCOME (LOSS): | ||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||
| COMPREHENSIVE INCOME (LOSS) | $ | $ | ( | ) | ||||
| FS-3 |
ELONG POWER HOLDING LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
(Amount in U.S. dollars, except for number of shares or otherwise noted)
Class A Ordinary Share | Class B Ordinary Share |
Additional | Other | Total Shareholders’ | ||||||||||||||||||||||||||||||||||||
| Ordinary Shares * | Ordinary Shares * | Treasury |
Paid-in | Statutory | Accumulated | Comprehensive |
Equity | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | shares | Capital | Reserve | Deficit | Income (loss) |
(Deficit) | |||||||||||||||||||||||||||||||
| Balance as of January 1, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||||||||
| Registration of ordinary shares in connection with share incentive plan | - | ( | ) | |||||||||||||||||||||||||||||||||||||
| Net loss from continuing operations | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Net loss from discontinued operations | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Other comprehensive income | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||||||||
| Class A Ordinary Share | Class B Ordinary Share | Additional | Other | Total Shareholders’ | ||||||||||||||||||||||||||||||||||||
| Ordinary Shares * | Ordinary Shares * | Treasury | Paid-in | Statutory | Accumulated | Comprehensive | Equity | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | shares | Capital | Reserve | Deficit | Income (loss) | (Deficit) | |||||||||||||||||||||||||||||||
| Balance as of January 1, 2026 | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
| Class A ordinary shares issued to investors, net of offering costs | - | |||||||||||||||||||||||||||||||||||||||
| Issuance of Class B ordinary shares for Debt Settlement | - | |||||||||||||||||||||||||||||||||||||||
| Issuance of Class B to a shareholder | - | |||||||||||||||||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Disposal of subsidiaries | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| FS-4 |
ELONG POWER HOLDING LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(Amount in U.S. dollars, except for number of shares or otherwise noted)
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Provision for losses on accounts receivable | ||||||||
| Provision of obsolete inventory | ||||||||
| Depreciation and amortization expense | ||||||||
| Interest on lease liabilities | ||||||||
| Amortization of operating and finance right-of-use assets | ||||||||
| Gain on disposals of property, plant and equipment | ( | ) | ||||||
| Gain from debt forgiveness | ( | ) | ||||||
| Provision (reversal) for warranty liability | ( | ) | ||||||
| Fair value losses on short-term investments | ||||||||
| Share of profit from equity method investment | ( | ) | ||||||
| Gain on disposal of subsidiaries | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventories | ( | ) | ||||||
| Amounts due from related parties | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Long term accounts receivable | ||||||||
| Accounts and notes payable | ( | ) | ||||||
| Amounts due to related parties | ||||||||
| Contract liabilities | ( | ) | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Product warranty liability | ( | ) | ||||||
| Lease liability | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
| Proceeds from disposal of short term investments | ||||||||
| Placement of short-term investments | ( | ) | ||||||
| Placement of equity method investment | ( | ) | ||||||
| Disposal of subsidiaries, net of cash disposed | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from borrowings from related parties | ||||||||
| Repayment of borrowings to related parties | ( | ) | ||||||
| Proceeds from borrowings from third parties | ||||||||
| Repayments of borrowings to third parties | ( | ) | ( | ) | ||||
| Offering costs | ( | ) | ||||||
| Proceeds from issuance of common stock | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash | ( | ) | ( | ) | ||||
| Net increase in cash, cash equivalents and restricted cash | ( | ) | ||||||
| Cash and cash equivalents and restricted cash, beginning of period | ||||||||
| Cash and cash equivalents and restricted cash, end of period | $ | |||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Issuance of Class B ordinary shares for Debt Settlement | ||||||||
| Issuance of Class B to a shareholder | ||||||||
| Short term investment Redemption Proceeds Applied to Offset Loans | ||||||||
| Lease liabilities arising from obtaining right-of-use assets | ||||||||
The following tables provide a reconciliation of cash, cash equivalents and restricted cash reported within the balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows:
| As
of June 30, 2026 | As
of December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Cash and cash equivalents, beginning of the period | $ | $ | ||||||
| Restricted cash, beginning of the period | ||||||||
| Total cash, cash equivalents and restricted cash at beginning of the period | ||||||||
| Cash and cash equivalents, end of the period | ||||||||
| Restricted cash, end of the period | ||||||||
| Total cash, cash equivalents and restricted cash at end of the period | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| FS-5 |
ELONG POWER HOLDING LIMITED AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
Principal activities
Elong Power Holding Limited (“Elong Power” or “ELPW”) was incorporated under the laws of the Cayman Islands on August 18, 2023. Elong Power, through its subsidiaries (collectively “the Company”) noted below, divested its battery manufacturing subsidiary in March 2026 and transitioned to an asset-light business model focusing primarily on energy storage system integration, while retaining capabilities in research and development, sales and full-lifecycle services.
Reverse Recapitalization
On
November 21, 2024 (the “Closing Date”), Elong consummated the business combination with TMT Acquisition Corp (“TMT”),
following the approval of the transaction. At the Closing, Merger Sub merged with and into TMT, with TMT surviving the merger and becoming
a wholly owned subsidiary of Elong.
Elong
was determined to be the accounting acquirer as it comprises the ongoing operations, its senior management leads the combined company,
and its shareholders hold the majority of voting power after the transaction. The Business Combination is not a business combination
under ASC 805 because TMT was not considered a business. Accordingly, the transaction is accounted for as a reverse recapitalization,
which is equivalent to Elong issuing shares for the net monetary assets of TMT, accompanied by a recapitalization. As a result, Elong’s
historical financial statements became those of the combined company, with retrospective adjustments to reflect the reverse recapitalization.
| Subsidiaries | Place of incorporation |
Date of incorporation |
Percentage of ownership |
Principal activities | ||||||
| Elong Power Holding Co., Limited | % | |||||||||
| Elong Power (Hong Kong) Holding Limited (“Elong Power (Hong Kong)”) | % | |||||||||
| Elong Power (Beijing) Co., Ltd. (“Elong Beijing”) | % | |||||||||
Disposal
On
December 15, 2025, the Company initiated its disposal plan of Elong Power International Co., Limited and its subsidiaries
(collectively referred to as the “Disposal Group”). On March 17, 2026, the Company completed the disposal of equity
interests in the Disposal Group to WAY (Hong Kong) Limited, a non-affiliated third party, at a purchase price of $
The Disposal Group consists of the following entities:
| ● | Elong Power International Co., Limited | |
| ● | Jing Yang (Hong Kong) International Limited | |
| ● | Jingyang Power (Ganzhou) Co., Ltd. | |
| ● | Huizhou Jingyang Energy Technology Co., Ltd. | |
| ● | Ganzhou Zhangyang Energy Technology Co., Ltd. | |
| ● | Zibo Jingyang New Energy Technology Co., Ltd. |
| FS-6 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of presentation
The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) to reflect the financial position, results of operations and cash flows of the Company. Significant accounting policies followed by the Company in the preparation of the accompanying unaudited condensed consolidated financial statements are summarized below.
(b) Principles of consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).
The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All intercompany transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meetings of the board of directors or to govern the financial and operating activities.
(c) Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. In accordance with ASC 250, the changes in estimates will be recognized in the same period of changes in facts and circumstances. The Company bases its estimates on past experiences and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, allowances for expected credit losses, fair value measurement of short-term investments, product warranty provision, useful lives and impairment of long-lived assets, and valuation allowance for deferred tax assets.
(d) Functional currency and foreign currency translation
The Company’s reporting currency is the United States dollars (“$”). The functional currency of ELPW and its subsidiary which is incorporated in BVI, Cayman Islands and Hong Kong is United States dollars (“$”). The functional currency of the other subsidiaries is RMB. The determination of the respective functional currency is based on the criteria set out by Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters.
Revenues and expenses of its subsidiaries have been translated into United States dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting translation gain and loss adjustments are recorded directly as a separate component of shareholders’ equity. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. Exchange gains or losses arising from foreign currency transactions are included in the determination of net loss for the respective periods.
RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC, which are determined largely by supply and demand. Translation of amounts from RMB into US dollars has been made at the following exchange rates for the respective periods:
| Six months ended June 30, 2026 | ||||||||
| Balance sheet, except for equity accounts | RMB | |||||||
| Income statement and cash flows | RMB | |||||||
| Year ended December 31, 2025 | ||||||||
| Balance sheet, except for equity accounts | RMB | |||||||
| Income statement and cash flows | RMB | |||||||
| Six months ended June 30, 2025 | ||||||||
| Balance sheet, except for equity accounts | RMB | |||||||
| Income statement and cash flows | RMB |
| FS-7 |
(e) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand and in banks and highly liquid investments, which are unrestricted from withdrawal or use, or which have original maturities of three months or less.
As of June 30, 2026 | As of December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Cash and cash equivalents | $ | $ | ||||||
(f) Short term investment
The Company classifies fund investments with original investment terms exceeding three months but less than one year, restricted use trading cash deposited with broker-dealer securities accounts and quoted equity securities held-for-sale as short term investments.
Cash
held in such brokerage accounts may only be utilized for securities trading transactions and is unavailable for the Company’s
general purpose operating expenditures. Quoted equity securities are accounted for under ASC Topic 320, Investments-Debt and Equity
Securities, and measured at fair value as of each reporting date. All realized and unrealized gains and losses arising from equity
securities trading and fund related investment income have been recognized in the unaudited condensed consolidated statements of
operations and comprehensive loss. Unrealized losses related to these investments were $
(g) Accounts receivable
In January 2022, the Company adopted ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement on Credit Losses on Financial Instruments”, including certain subsequent amendments, transitional guidance and other interpretive guidance within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02 and ASU 2020-03 (collectively, including ASU 2016-13, “ASC 326”). ASC 326 introduces an approach based on expected losses to estimate the allowance for doubtful accounts, which replaces the previous incurred loss impairment model. The Company’s estimation of allowance for doubtful accounts considers factors such as historical credit loss experience, age of receivable balances, current market conditions, reasonable and supportable forecasts of future economic conditions, as well as an assessment of receivables due from specific identifiable counterparties to determine whether these receivables are considered at risk or uncollectible. The Company assesses collectability by pooling receivables that have similar risk characteristics and evaluates receivables individually when specific receivables no longer share those risk characteristics. For receivables evaluated individually, when it is determined that foreclosure is probable or when the debtor is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of collateral, expected credit losses are based on the fair value of the collateral at the reporting date. The adoption of ASC 326 did not have a material impact on the Company’s financial position, results of operations and cash flows. No credit impairment losses were recognized as of June 30, 2026 and December 31, 2025. The Company regularly reviews the creditworthiness of its customers to determine whether a credit impairment has occurred on their carrying amounts. The Company writes off accounts and contract receivables against the allowance when a balance is determined to be uncollectible.
| FS-8 |
(h) Equity method investment
The Company’s long-term investment represents equity interest in a limited liability partnership organization. The investment is accounted for under the equity method of accounting pursuant to ASC 323, Investments-Equity Method and Joint Ventures, as the investment provides the Company with the ability to exercise significant influence over the operating and financial activities of the investee. The investment is initially recorded at cost. The carrying amount is subsequently adjusted for the Company’s proportionate share of the investee’s net earnings or losses and reduced by distributions received. The investment is assessed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If the carrying amount of the investment exceeds its estimated fair value, an impairment loss is recognized in the statements of operations equal to the excess.
(i) Property, plant and equipment, net
Property, plant and equipment are stated at cost less accumulated depreciation and impairment charges. Depreciation is calculated primarily based on the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the assets:
| Category | Estimated Useful Life | |
| Office equipment | ||
| Leasehold improvements |
(j) Fair value measurement
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.
Authoritative literature provides a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset or liability categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement as follows:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.
| FS-9 |
When available, the Company uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Company will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates.
The carrying amounts of cash and cash equivalents, accounts receivable, amounts due from related parties, other receivables (included in “other current assets”), accounts payable, amounts due to related parties, short-term borrowings, other payables (included in “accrued expenses and other current liabilities”) approximate their fair value due to the short-term maturity of these instruments. The carrying value of lease liabilities approximate their fair value as they are measured at amortized cost using the incremental borrowing rate approximates the market interest rate. The Company’s short-term investments are carried at fair value (Level 1).
(k) Revenue recognition
From January 1, 2019, the Company adopted the new guidance of ASC Topic 606, Revenue from Contracts with Customers (Topic 606), which requires the Company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company applies the following steps to recognize revenues: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies a performance obligation.
The core principle is that the Company recognizes revenue to depict the transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled. This principle is centered on the transfer of control of the promised goods to the customer—revenue is recognized when the customer obtains control, rather than when the risks and rewards of ownership are transferred. Control refers to the ability to direct the use of the asset and obtain substantially all of the remaining benefits from it, including the ability to prevent other entities from directing its use or obtaining its benefits.
The Company primarily engages in the sales of energy storage system integration equipment and supporting accessories. The Company generates revenue from sales of such products through sales contracts including master agreements and sales orders from the customers, which contain fixed sales price, payment terms, specifications, delivery and acceptance terms, transportation terms, etc., and are all signed-off and stamped. The Company applied the guidance of ASC Topic 606-10-25-16 through 18 in order to verify which promises should be assessed for classification as distinct performance obligations.
The Company also identifies only one performance obligation in the contract, which is to deliver such products.
Revenue is recognized at the point in time upon the control of the promised goods is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to for the products sold.
A receivable is recorded when the Company has an unconditional right to consideration. A right to consideration is unconditional if only the passage of time is required before payment of that consideration is due.
The
Company provides a standard warranty on its products, which is not sold separately and does not constitute a separate performance obligation.
The warranty period generally ranges from one
to
| FS-10 |
Net revenues by product:
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Energy storage system integration equipment & supporting accessories | $ | $ | ||||||
Contract Balances
The Company presents the contract in the unaudited condensed consolidated balance sheets as a contract asset or a contract liability, depending on the relationship between the entity’s performance and the customer’s payment.
Contract asset represent the Company’s right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditioned on something other than the passage of time.
The
contract liabilities are advances from customers, which represent the cash received for goods in advance of revenue recognition and is
recognized as revenue when the Company fulfills its performance obligation. The Company’s advances from customers amounted to $
The table below presents the activity of contract liabilities during the six months ended June 30, 2026 and 2025, respectively.
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Balance at beginning of period | $ | $ | ||||||
| Deposits received | ||||||||
| Revenue recognized | ( |
( |
||||||
| Output Value-Added Tax | ( |
( |
||||||
| Exchange difference | ||||||||
| Balance at end of period | $ | $ | ||||||
(l) Product warranty
The Company provides a standard warranty on its products sold, which entails repair or replacement of non-conforming items, in conjunction with the sales of products.
The
Company’s product warranty generally ranges from one to
The Company review and adjust the estimates to ensure that accruals are adequate to meet expected future warranty obligations. Initial warranty data is limited early in the launch of a new product and accordingly, future adjustments to the warranty accrual may be material.
| FS-11 |
The portion of the warranty that is expected to incur within the next 12 months is recorded in current liabilities, while the remaining balance is recorded in non-current liabilities on the unaudited consolidated balance sheets. Warranty expense is recorded as a component of cost.
The Company considers the standard warranty does not provide an incremental service to customers but rather assurance as to the quality of the energy storage system products, and therefore is not a separate performance obligation and should be accounted for in accordance with ASC 460, Guarantees.
(m) Cost of revenue
Cost of revenue includes the purchase cost of finished goods and accrued warranty expenses.
(n) Selling, general and administrative expenses
Selling
expenses consist primarily of employee salaries and business promotion expense. For the six months ended June 30, 2026 and 2025, selling
expenses were US$
General
and administrative expenses consist primarily of employee salaries, depreciation and amortization expenses, legal, and other professional
services fees, lease and other general corporate related expenses. For the six months ended June 30, 2026 and 2025, general and administrative
expenses were US$
(o) Related parties
The Company adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.
(p) Employee benefits
Full-time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, work-related injury benefits, maternity insurance, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiaries of the Company make contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Company’s obligations are limited to the amounts contributed and no legal obligation beyond the contributions made. For the six months ended June 30, 2026 and 2025, employee benefits expenses were $ and $, respectively.
(q) Income taxes
Current income taxes are recorded in accordance with the regulations of the relevant tax jurisdiction. The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Tax. Under this method, deferred tax assets and liabilities are recognized for the tax consequences attributable to differences between carrying amounts of existing assets and liabilities in the unaudited condensed consolidated financial statements and their respective tax basis, and operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of operations and comprehensive loss in the period of change. Valuation allowances are established when necessary to reduce the amount of deferred tax assets if it is considered more likely than not that amount of the deferred tax assets will not be realized.
| FS-12 |
Uncertain tax positions
An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. Interest and penalties related to uncertain tax positions, if any, are recorded under accrued expenses and other current liabilities on its unaudited condensed consolidated balance sheets and under other expenses in its consolidated statements of comprehensive loss. The Company did not recognize any significant interest and penalties associated with uncertain tax positions for the six months ended June 30, 2026 and 2025. As of June 30, 2026 and December 31, 2025, the Company did not have any significant unrecognized uncertain tax positions.
(r) Value-added tax (“VAT”)
The
Company is subject to statutory VAT of
(s) Comprehensive income (loss)
The Company applies ASC 220, Comprehensive Income, with respect to reporting and presentation of comprehensive loss and its components in a full set of financial statements. Comprehensive loss is defined to include all changes in equity of the Company during a period arising from transactions and other events and circumstances except those resulting from investments by shareholders and distributions to shareholders. For the periods presented, the Company’s comprehensive loss includes net loss and other comprehensive loss, which primarily consists of the foreign currency translation adjustments.
(t) Lease
From January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Lease (FASB ASC Topic 842). The adoption of Topic 842 resulted in the presentation of right-of-use (“ROU”) assets and operating lease liabilities on the consolidated balance sheet. The Company has elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any expired or existing leases as of the adoption date. Lastly, the Company elected the short-term lease exemption for all contracts with lease terms of 12 months or less.
At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange of a consideration. To assess whether a contract is or contains a lease, the Company assess whether the contract involves the use of an identified asset, whether it has the right to obtain substantially all the economic benefits from the use of the asset and whether it has the right to control the use of the asset.
The right-of-use assets and related lease liabilities are recognized at the lease commencement date. The Company recognizes operating lease expenses on a straight-line basis over the lease term.
Right-of-use of assets
The Company recognizes right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. All right-of-use assets are reviewed for impairment annually. There was no impairment for right-of-use lease assets for the six months ended June 30, 2026 and 2025.
| FS-13 |
Lease liabilities
Lease liabilities are initially measured at the present value of the outstanding lease payments at the commencement date, discounted using the Company’s incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed lease payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee and any exercise price under a purchase-options that the Company is reasonably certain to exercise. Lease liabilities are measured at amortized cost using the effective-interest-rate method. It is remeasured when there is a change in future lease payments, if there is a change in the estimate of the amount expected to be payable under a residual-value guarantee, or if there is any change in the Company assessment of purchase-options, contract extensions or termination options.
The Company complies with accounting and disclosure requirements ASC Topic 260, “Earnings Per Share.” Earnings (losses) per ordinary share is computed by dividing net income by the weighted average number of ordinary shares issued and outstanding for the periods except that it does not include ordinary shares subject to forfeiture or cancellation. Diluted net income per share is computed using the weighted average number of ordinary shares and, if dilutive, potential ordinary shares outstanding during the period. Potentially dilutive securities have been excluded from the computation of diluted net income per share if their inclusion is anti-dilutive. Potential ordinary shares consist of the incremental ordinary shares issuable upon the exercise of stock options, warrants, and unvested restricted shares. The dilutive effect of outstanding stock options, warrants, and restricted shares is reflected in diluted earnings per share by application of the treasury stock method and the if-converted method, respectively. As of June 30, 2026, the Company had outstanding warrants that represent potential ordinary shares. As the Company reported a net loss from continuing operations for the periods presented, the inclusion of these potentially dilutive shares would have an anti-dilutive effect. Consequently, they were excluded from the computation of diluted net loss per share. As a result, diluted earnings per ordinary share is the same as basic earnings per ordinary share for the periods presented.
In accordance with ASC 260-10-45, the Indemnity Escrow Shares and Earnout Escrow Shares are considered contingently returnable shares and therefore are excluded from the computation of basic and diluted earnings per share for the six months ended June 30, 2026 and 2025 (on a retroactively adjusted basis).
(v) Segment reporting
An operating segment is a component of the Company that engages in business activities from which it may earn revenue and incur expenses and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s chief operating decision maker in order to allocate resources and assess performance of the segment.
In
accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial
information is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate
resources and in assessing performance. The Company’s revenue segments have similar economic characteristics and they are managed
as a single business unit. The Company uses the “management approach” in determining reportable operating segments. The management
approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating
decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s CODM has
been identified as the chief executive officer (the “CEO”), who reviews consolidated results when making decisions about
allocating resources and assessing performance of the Company. The Company has determined that there is only
The Company’s long-lived assets are all located in China and substantially all monitoring and control activities of its operations are conducted in China. Therefore, no geographic information is presented.
| FS-14 |
(w) Recent accounting pronouncements not yet adopted
In November 2025, the FASB issued ASU 2025-08, Financial Instruments — Credit Losses (“Topic 326”): Purchased Loans (“ASU 2025-08”). The amendments expand the population of acquired loans subject to the gross-up approach, treating non-credit-deteriorated loans (excluding credit cards) as “seasoned” if purchased at least 90 days after origination or acquired in a business combination. ASU 2025-08 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that adoption of this ASU will have on its interim financial statement disclosures.
In December 2025, the FASB issued ASU 2025-11, which clarifies the scope and disclosure requirements for interim financial reporting under ASC 270. The amendments introduce a principle requiring disclosure of events and transactions occurring after the end of the most recent annual reporting period that have a material impact on the entity and consolidate certain interim disclosure requirements. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that adoption of this ASU will have on its interim financial statement disclosures.
3. DISCONTINUED OPERATIONS
On
March 17, 2026, the Company completed the disposal of equity interests in Elong Power International Co., Limited and its subsidiaries
to a non-affiliated third party for a purchase price of $
| US$ | ||||
| Consideration: | ||||
| As of March 31, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Operating lease right of use assets,net | ||||||||
| Finance lease right of use assets,net | ||||||||
| Total non current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Current portion of long-term loan payable | ||||||||
| Accounts and notes payable | ||||||||
| Amounts due to related parties | ||||||||
| Contract liabilities | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Product warranty provision, current | ||||||||
| Total current liabilities | ||||||||
| Product warranty provision-non current | ||||||||
| Lease liabilities, non current | ||||||||
| Finance liabilities, non current | ||||||||
| Total non current liabilities | ||||||||
| Total liabilities | ||||||||
| Total net assets of the Disposal Group | $ | ( | ) | ( | ) | |||
| Gain on disposal before reclassification of cumulative foreign currency translation differences of the Disposal Group to profit or loss | $ | - | ||||||
| Reclassification of cumulative foreign currency translation losses of the Disposal Group to profit or loss | ( | ) | - | |||||
| Gain on disposal recognized in the unaudited condensed consolidated Statements of Operations and Comprehensive income (loss) | - | |||||||
| FS-15 |
Reconciliation of the major classes of losses from discontinued operations in the consolidated statements of operations and comprehensive loss for the three months ended March 31, 2026 and for six months ended June 30, 2025 is as follow:
| For the three months ended March 31, | For the six months ended June 30, | |||||||
| 2026 | 2025 | |||||||
| Major classes of line items constituting pre-tax profit of discontinued operations | ||||||||
| Revenues | ||||||||
| Cost of revenues | $ | $ | ( | ) | ||||
| Selling expenses | ( | ) | ||||||
| General and administrative expenses | ( | ) | ||||||
| Interest expense,net | ( | ) | ( | ) | ||||
| Others,net | ||||||||
| Loss from discontinued operations, before income tax | ( | ) | ( | ) | ||||
The condensed cash flows of the Disposed Group were as follows for the three months ended March 31, 2026 and for the six months ended June 30, 2025:
| For the three months ended March 31, | For the six months ended June 30, | |||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
| Net cash generated from financing activities | $ | $ | ||||||
4. SHORT TERM INVESTMENT
As of June 30, 2026 | As of December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Short term investment | ||||||||
| Total | $ | $ | ||||||
| FS-16 |
The Company classifies fund investments with original investment terms exceeding three months but less than one year, restricted use trading cash deposited with broker-dealer securities accounts and quoted equity securities held-for-sale as short term investments.
During the six-month period ended June 30, 2026, the Company disposed of all money-market fund investments classified as short term investments as at December 31, 2025. Accordingly, the Company had no remaining balance in these money-market fund investments and restricted use trading cash deposited with broker-dealer at the end of the interim period.
The Company executed purchases and disposals of quoted equity securities throughout the six-month period. All such quoted equity securities are measured at fair value (level 1) with changes in fair value recognized in net income. All realized trading gains or losses are presented within other income on the unaudited condensed consolidated statement of operations.
5. ACCOUNTS RECEIVABLE
Account receivable consisted of the following:
As of June 30, 2026 | As of December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Accounts receivable | $ | $ | ||||||
| Total | $ | $ | ||||||
6. PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consisted of the following:
As of June 30, 2026 | As of December 31, 2025 | |||||||
| Value added tax recoverable | $ | $ | ||||||
| Prepayments to suppliers | ||||||||
| Deposits | ||||||||
| Loan receivables from third parties | ||||||||
| Others | ||||||||
| Total | $ | $ |
Loan receivables from third parties
The
amount represented interest-free loans of RMB
7. EQUITY METHOD INVESTMENT
In
May 2026, the Company and other partners incorporated a limited liability partnership. The Company holds
| FS-17 |
A summary of financial information for our equity method investee is as follows:
| As of June 30, | ||||
| 2026 | ||||
| ASSETS | ||||
| Current assets | ||||
| Cash and cash equivalents | $ | |||
| Prepaid expenses and other current assets | ||||
| Total current assets | ||||
| Total non current assets | ||||
| Total assets | $ | |||
| LIABILITY AND SHAREHOLDERS’ EQUITY | ||||
| Total liability | ||||
| Additional paid-in capital | ||||
| Retained earnings | ||||
| Accumulated other comprehensive (loss) income | ||||
| Total shareholders’ equity | ||||
| Total liability and shareholders’ equity | ||||
| Company equity method investments | ||||
For the six months ended June 30, 2026 | ||||
| USD | ||||
| Revenues | $ | |||
| Cost of revenues | ||||
| Gross Profit | ||||
| Interest income, net | ||||
| Net income | $ | |||
8. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment as of June 30, 2026 and December 31, 2025 consisted of the following:
As of June 30, 2026 | As of December 31, 2025 | |||||||
| Leasehold improvements | $ | $ | ||||||
| Office equipment | ||||||||
| Total Costs | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Carrying amount | $ | $ | ||||||
During
the six months ended June 30, 2026 and 2025, the Company incurred depreciation expense of $
9. LEASE
Operating Lease
In January 2025, the Company signed an office lease agreement with a third party for a period of three years, from April 14, 2025 to May 14, 2028.
Supplemental balance sheet information related to operating lease was as follows:
As of June 30, 2026 | As
of December 31, 2025 | |||||||
| Right-of-use assets | $ | $ | ||||||
| Lease liabilities current | ||||||||
| Lease liabilities non-current | ||||||||
| Lease liabilities | $ | $ | ||||||
| FS-18 |
The components of lease expense for the six months ended June 30, 2026 and 2025 were as follows:
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Operating lease expense | $ | $ | ||||||
| Total lease expense | $ | $ | ||||||
Cash
paid for operating lease liabilities was $
The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2026:
| Operating leases | ||||
| 2026 (remaining of year) | ||||
| 2027 | ||||
| 2028 | ||||
| Total future lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Present value of lease liabilities | $ | |||
Lease term and discount rate:
As of June 30, 2026 | As
of December 31, 2025 | |||||||
| Weighted-average remaining lease term (years) | ||||||||
| Operating leases | ||||||||
| Weighted-average discount rate | ||||||||
| Operating leases | % | % | ||||||
10. SHORT TERM LOANS-UNRELATED PARTIES
As of June 30, 2026 and December 31, 2025, short term loans from third parties for working capital purposes were as following:
As of June 30, 2026 | As of December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Third party loans | ||||||||
| Total | $ | $ | ||||||
Third party loans as of June 30, 2026 and December 31, 2025 consisted of the following:
| As of June 30, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Ms. Xiuxia Wang | ||||||||
| Mr. Hongshan Liu | ||||||||
| Fujian Chuanzhiyuan Industrial Investment Co., Ltd. | ||||||||
| Chris Young | ||||||||
| Ma Xin | ||||||||
| CISI Investment Limited | ||||||||
| Ms. Li Xiaozhen | ||||||||
| Major Goal Limited | ||||||||
| Total | $ | $ | ||||||
| FS-19 |
Ms. Xiuxia Wang
In
December 2024, the Company obtained aggregate borrowings of RMB
Mr. Hongshan Liu
On
December 31, 2024, the Company obtained an unsecured loan of RMB
Fujian Chuanzhiyuan Industrial Investment Co., Ltd.
On
December 30, 2024, the Company borrowed a revolving credit loan of RMB
Chris Young
On
October 21, 2025, the Company obtained an unsecured loan of RMB
Ma Xin
On
September 19, 2025, the Company borrowed an unsecured credit loan of RMB
CISI Investment Limited
In
2025, Jingyang HK transferred its note payable of RMB
Ms. Li Xiaozhen
As
of the merger date on November 21, 2024, the Company assumed liabilities of TMT upon completion of the merger, including a
short-term, interest-free loan of RMB
| FS-20 |
Major Goal Limited
On
June 26, 2026, the Company obtained an unsecured loan of RMB
Mr. Kuan Ren
During
the six months ended June 30, 2026, the Company received proceeds of RMB
11. ACCOUNTS PAYABLE
Accounts payable consisted of the following:
As of June 30, 2026 | As of December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Accounts payable | $ | $ | ||||||
12. ACCRUED EXPENSES AND OTHER LIABILITIES
| As of June 30, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Accrued payroll and welfare | $ | $ | ||||||
| Interest payable | ||||||||
| Accrued professional fees | ||||||||
| Loan payables to third parties | ||||||||
| Others | ||||||||
| Total | $ | $ | ||||||
Loan payables to third parties
The
amount represented interest-free loans of RMB
| FS-21 |
13. PRODUCT WARRANTY PROVISION
The movement of product warranty provision is as following:
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Balance at beginning of period | $ | $ | ||||||
| Additions | ||||||||
| Foreign exchange adjustment | ||||||||
| Balance at end of period | ||||||||
| Less: Current portion | ||||||||
| Non-current portion | $ | |||||||
A warranty provision is made based on past experience and future expectations and an assessment of the probability of an outflow for the warranty obligations as a whole.
14. INCOME TAXES
Corporate income tax
Cayman Islands and British Virgin Islands (“BVI”)
Under the current laws of the Cayman Islands, Elong Power Holding Limited (“Elong Power”) is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.
The Company’s subsidiary, Elong Power Holding Co., Limited (“Elong Power BVI”) is incorporated in the BVI and under the current laws of the BVI, Elong Power BVI is not subject to tax on income or capital gain. In addition, payments of dividend by the subsidiary to their shareholders are not subject to withholding tax in the BVI.
Hong Kong
Under
the current Hong Kong Inland Revenue Ordinance,
The PRC
The
Company’s subsidiaries that are each incorporated in the PRC are subject to Corporate Income Tax (“CIT”) on the taxable
income as reported in their respective statutory financial statements adjusted in accordance with the new PRC Enterprise Income Tax Laws
(“PRC Income Tax Laws”) effective from January 1, 2008. Pursuant to the PRC Income Tax Laws, the Company’s PRC subsidiaries
are subject to a CIT statutory rate of
The Company’s provision for income tax expenses consisted of:
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| PRC income tax | ||||||||
| Current | $ | $ | ||||||
| Total | $ | $ | ||||||
| FS-22 |
Reconciliations of the income tax expenses (benefits) computed by applying the PRC statutory income tax rate of 25% to the Company’s income tax expenses for the six months ended June 30, 2026 and 2025 presented are as follows:
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Loss from operations in mainland China | $ | ( | ) | $ | ( | ) | ||
| Income from operations in Hong Kong and others | ( | ) | ||||||
| Income from operations before income taxes | ( | ) | ||||||
| Tax credit at PRC corporate income tax rate
of | ( | ) | ||||||
| Non-taxable income non-deductible expenses | ( | ) | ||||||
| Changes in valuation allowance | ||||||||
| Income tax expenses | $ | $ | ||||||
The
Company considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will be more-likely-than-not
realized. This assessment considers, among other matters, the nature, frequency and severity of recent loss and forecasts of future profitability.
These assumptions require significant judgment, and the forecasts of future taxable income are consistent with the plans and estimates
the Company is using to manage the underlying businesses. The statutory income tax rate of
The Company’s deferred tax assets consisted of the following components:
As of June 30, 2026 | As of December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Deferred tax assets | ||||||||
| Net operating loss carry-forwards | $ | $ | ||||||
| Accrued cost and expense | ||||||||
| Provision for warranty liability | ||||||||
| Lease expense | ||||||||
| Less: valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax assets, net of valuation allowance | $ | $ | ||||||
| FS-23 |
A valuation allowance is provided against deferred tax assets when the Company determines that it is more-likely-than-not that the deferred tax assets will not be utilized in the future.
The
Company has tax losses arising in Mainland China of $
15. EMPLOYEE BENEFIT PLAN
Companies operating in China are required to participate in various government sponsored employee benefit plans, including certain social insurance, housing provident funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local government from time to time at locations where we operate our businesses. The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different levels of economic development in different locations. Currently, our PRC subsidiaries are making contributions to the plans based on the minimum standards as required by law for most employees. With respect to the underpaid or unpaid employee benefits, we may be required to complete registrations, make up the contributions for these plans as well as to pay late fees and fines. If we are subject to late fees or fines in relation to the underpaid or unpaid employee benefits, our financial condition and results of operations may be adversely affected. We may also be subject to regulatory investigations and other penalties if our other employment practices are deemed to be in violation of relevant PRC laws and regulations.
The
Company accrues for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by
the local government. The total employee benefits expensed as incurred were $
16. RELATED PARTY BALANCES AND TRANSACTIONS
The principal related parties with which the Company had transactions as of June 30, 2026 and December 31, 2025, and also for the six months ended June 30, 2026 and 2025 presented are as follows:
a) Related Parties
| Name | Relationship with the Company | |
| Beijing Xinlongmai Enterprise Management Co., Ltd. (“Beijing Xinlongmai”) | ||
| Huizhou Highpower Technology Co., Ltd. (“Huizhou Highpower”) | ||
| Ms. Xiaodan Liu | ||
| Beijing Danwu Technology Co., Ltd. |
b) Related party transactions
The following table consists of the purchases that have been entered into with related parties:
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Lease expense for renting a vehicle from a related party | ||||||||
| –Ms. Xiaodan Liu | $ | $ | ||||||
| FS-24 |
c) Short-term loans payable to related parties
| As of June 30, | As of December 31, | |||||||||
| Note | 2026 | 2025 | ||||||||
| (Unaudited) | (Audited) | |||||||||
| Beijing Xinlongmai Enterprise Management Co., Ltd. (“Beijing Xinlongmai”) | (a) | $ | $ | |||||||
| Huizhou Highpower Technology Co., Ltd. (“Huizhou Highpower”) | (a) | |||||||||
| Ms. Xiaodan Liu | (b) | |||||||||
| Beijing Danwu Technology Co., Ltd. | (c) | |||||||||
| Total | $ | $ | ||||||||
| (a) |
In
2025, Huizhou Jingyang transferred its debt of RMB
|
(b) |
In
2025, Jingyang HK borrowed RMB
During the six months ended June 30, 2026, the Company made cash repayments of RMB |
| (c) |
| FS-25 |
For
the six months ended June 30, 2026 and 2025 interest expense of $
d) Amounts due from related parties
Amounts due from related parties consisted of the following for the periods indicated:
| Relationship | As of June 30, 2026 | As of December 31, 2025 | Note | |||||||||
| (Unaudited) | (Audited) | |||||||||||
| Ms. Xiaodan Liu | $ | $ | Lease deposit and receivable | |||||||||
As
of June 30, 2026 and December 31, 2025, the Company had security deposits of $
On June 23, 2026, the Company entered into a securities purchase agreement with GRACEDAN CO., LIMITED, pursuant to which the Company agreed to issue and sell to GRACEDAN CO., LIMITED Class B ordinary shares of the Company, valued at $ per share, the closing price of the Company’s Class A ordinary shares as of June 22, 2026. As of June 2026, the subscription receivable of $ remained outstanding from GRACEDAN CO., LIMITED (controlled by Ms. Xiaodan Liu), and was subsequently settled in full on July 21, 2026.
e) Amounts due to related parties
Amounts due to related parties consisted of the following for the periods indicated:
| Relationship | As of June 30, 2026 | As of December 31, 2025 | Note | |||||||||
| Ms. Xiaodan Liu | Payable for employee reimbursement | |||||||||||
| Ms. Xiaodan Liu | Interest payable | |||||||||||
| Total | $ | $ | ||||||||||
17. EQUITY
Ordinary shares
At
the annual general meeting of shareholders of the Company held on January 6, 2026, the shareholders approved that the Company’s
authorized share capital be increased from US$
| FS-26 |
On
December 2, 2025, the Company effected a
The par value of the Class A ordinary shares and Class B ordinary shares was increased in proportion to the cumulative ratio of the share consolidation to $ per share and the number of authorized ordinary shares was adjusted in proportion to the cumulative ratio of the share consolidation to Class A ordinary shares of a par value of US$ each and Class B ordinary shares of a par value of US$ each.
As of June 30, 2026 and December 31, 2025, the Company had and Class A ordinary shares authorized, respectively, and and Class B ordinary shares authorized, respectively.
As of June 30, 2026 and December 31, 2025, the Company had and Class A ordinary shares issued, respectively, of which and were outstanding, respectively. The issued but not outstanding shares as of June 30, 2026 consist of forfeited Earnout Escrow Shares pending cancellation and shares registered on Form S-8 and classified as treasury stock reserved for future issuance under the Company’s share incentive plan. In July 2026, the forfeited Earnout Escrow Shares were formally canceled and are no longer outstanding or issuable.
18. SEGMENT REPORTING
The Company’s chief operating decision maker has been identified as the Chief Executive Officer (“CEO”) who reviews financial information of operating segments based on US GAAP amounts when making decisions about allocating resources and assessing performance of the Company.
The
Company determined that it operated in
The Company primarily operates in the PRC and substantially all of the Company’s long-lived assets are located in the PRC.
| For the Six months ended June 30 | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Revenues | $ | $ | ||||||
| Less: | ||||||||
| Cost of revenues | ||||||||
| Staff cost | ||||||||
| Lease expense | ||||||||
| Depreciation and amortization expense | ||||||||
| Professional fee | ||||||||
| Interest expense (income) | ||||||||
| Other segment items(i) | ||||||||
| Segment net loss | ( | ) | ( | ) | ||||
| Consolidated net loss from continuing operations | $ | ( | ) | $ | ( | ) | ||
| (i) |
| FS-27 |
19. COMMITMENTS AND CONTINGENCIES
(i)
The total future minimum lease payments of property management fee and short-term lease under the non-cancellable operating lease with respect to the office as of June 30, 2026 are payable as follows:
| Lease Commitment | ||||
| Within 1 year | ||||
| 2-3 years | ||||
| Total | $ | |||
As
of June 30, 2026 and 2025, the Company had
(ii) Litigation
As
of December 31, 2025, there were 27 ongoing litigations associated with the Company’s subsidiaries under discontinued operations. The estimated liabilities amount total $
Following the completion of the disposal of these subsidiaries, the Group is no longer exposed to the potential liabilities associated with these litigations. As of June 30, 2026, the Company was not a party to any material pending litigation, legal claims or arbitration proceedings.
20. CONCENTRATION AND CREDIT RISK
(a) Customer Concentrations
The Company had the following customers that individually comprised 10% or more of net revenue for the six months ended June 30, 2026 and 2025 as follows:
| * | represents percentage less than 10% |
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Percentage of the Company’s sales of finished goods | ||||||||
| Customer A | % | * | % | |||||
| Customer B | % | * | % | |||||
| Customer C | * | % | % | |||||
| FS-28 |
The Company had the following customers that individually comprised 10% or more of net accounts receivable (including VAT) as of June 30, 2026 and December 31, 2025 as follows:
As of June 30, 2026 | As of December 31, 2025 | |||||||
| Percentage of the Company’s accounts receivable | ||||||||
| Customer A | % | * | % | |||||
| Customer D | * | % | % | |||||
(b) Supplier Concentrations
The Company relies on third parties for the supply of finished goods. In instances where these parties fail to perform their obligations, the Company may find alternative suppliers in the open market.
The Company had the following suppliers that individually comprised 10% or more of net purchases for the six months ended June 30, 2026 and 2025 as follows:
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Percentage of the Company’s net purchase of finished goods | ||||||||
| Supplier A | % | * | % | |||||
| Supplier B | % | * | % | |||||
| Supplier C | * | % | % | |||||
| * | represents percentage less than 10% |
The Company had the following suppliers that individually comprised 10% or more of accounts payable as of June 30, 2026 and December 31, 2025 as follows:
As of June 30, 2026 | As of December 31, 2025 | |||||||
| Percentage of the Company’s accounts payable | ||||||||
| Supplier B | * | % | % | |||||
| Supplier D | % | * | % | |||||
| * |
(c) Credit Risk
Assets
that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents. The
maximum exposure of such assets to credit risk is their carrying amount as at the balance sheet dates. As of June 30, 2026, cash and
cash equivalents of $
The Company’s operations are carried out in China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. In addition, the Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation among other factors.
| FS-29 |
21. SUBSEQUENT EVENTS
The Company has evaluated subsequent events and transactions that occurred after the balance sheet date through the date the unaudited condensed consolidated financial statements were issued and no subsequent events, other than those noted below, occurred that require accrual or disclosure.
In
July 2026, the Company completed one round of financing and received net proceeds of approximately $
On
August 10, 2026, the Company completed one round of financing and received net proceeds of approximately $
On
August 10, 2026, the Company effected a
During August 2026, the Company
generated aggregate gross proceeds of approximately $
On
August 27, 2026, the Company held an extraordinary general meeting (“EGM”) of shareholders, at which all ten
proposals submitted to shareholders were approved by the shareholders. Key approved resolutions include: ratification of the
| FS-30 |